While landing an order from a major retailer is a badge of honor for small businesses, scaling production and securing financing to fulfill that order can present significant challenges.
The Wall Street Journal reports that the excitement of landing a deal often fades when faced with the financial realities of producing and delivering products on time. Although retailers may agree to pay entrepreneurs shortly after the product hits the shelves, they typically do not help finance the production and delivery.
To bridge the gap, many entrepreneurs turn to alternative funding sources, like community development financial institutions, for quick financing that they may not receive from traditional banks.
Even getting onto the shelves doesn’t guarantee success. According to Steve Freeman, founder of Next Step Club Solutions—a food brokerage specializing in Costco sales—brands “have five seconds at five feet to get the member’s attention.” Costco often brings in new brands for an eight- to 12-week rotation, though buyers generally know within just a couple of weeks if a product will succeed.
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